KENYA – The Competition Authority of Kenya has conditionally approved KenolKobil’s takeover of Gulf Energy.
The oil dealer bought in 2019 by French firm Rubis. Energie has been barred from declaring any Gulf Energy Holdings Limited employee redundant for 24-months, after the transaction.
Rubis acquired KenolKobil at a cost of US$356m (KSh35.6 billion) in a new ownership structure that saw the firm delisted from the Nairobi Securities Exchange.
“The Authority is of the view that the proposed transaction is likely to lead to redundancies,” CAK said in a statement.
The merged entity will also be required to retain basic remuneration for all employees as well as employee benefits.
“The proposed merger is likely to affect the arrangements between the SMEs and Gulf and occasions the need to ensure that the SMEs are protected post-transaction,” CAK said.
Small and Medium Enterprises (SMEs) which have engagements with the merging entities shall enjoy the same benefits within the contract as provided at the signing of the contract.
“The merged entity shall ensure that the contracts entered into between Gulf Energy and the retail station dealers is maintained for the length of such contracts,” the authority stated.
Rubis finalised the acquisition of Gulf Energy Holdings Limited in December for an undisclosed amount.
The transaction, which was first announced on November 4, will see the merged entity become market leader with a combined market share of over 20 per cent.
Data by the Petroleum Institute of East Africa shows Gulf will add its 5.8 per cent market share to KenolKobil’s 15.4 per cent.
Prior to the acquisition, Total was the market leader controlling 16.4 per cent of petroleum sales followed by Vivo at 16.2 per cent.
“Whereas the transaction will lead occasion the merged entity gaining the market leader position, it will not confer a dominant position. Additionally, the merged entity will face competition from the other OMCs who control 78.8 per cent of the market,” CAK said.
The transaction, upon completion, will also increase the merged entity’s market share for Liquefied Petroleum Gas (LPG) to 13.5 per cent, coming third after Hashi’s 25 per cent market share and Total’s 21 per cent.
“This acquisition is in line with Rubis’ development strategy and will strengthen Rubis’ position in an area where the Group foresees a strong growth in terms of energy demand,” Rubis said in a statement.
Rubis Energie said it had acquired all the issued shares of Gulf Energy Holdings Limited (GEHL), the special purpose vehicle holding the oil marketing assets and businesses of Gulf Energy Limited.